A majority of oil & gas company officials are confident that their information security practices are effective, despite an acrossthe- board rise in security breaches in recent years, according to a new study.
The 2012 Global State of Information Security Survey, conducted by PricewaterhouseCoopers (PwC) and released in September, compiled data gathered from responses by 143 senior industry executives. According to PwC, 77% of respondents said information security practices at their respective firms were effective. About 46% however, reported that their companies ‘have a security strategy in place and are proactively executing it,' PwC said.
Hacking is the most common threat to data protection. Respondents said that, among the likely sources of information security breaches in 2011, hackers were responsible for 47% of the incidents, a 104% increase over three years.
The survey showed that the risk of hacking by current or former employees diminished slightly from 2009 to 2011. Nevertheless, insider activity remained a perceived threat in 2011, with respondents saying that current or former employees were suspects in about a quarter of incidents.
The threat of security breaches caused by third parties, including customers and suppliers, grew the most sharply over three years. In 2008, respondents said customers were believed responsible for 4% of incidents and partners or suppliers suspected in a similar percentage of cases. By 2011, those numbers had grown to 14% and 23% respectively.
About 59% of respondents said they expected spending on information security to increase over the next year, and that lack of an effective strategy and a lack of vision or understanding – not a shortage of funds – were the biggest obstacles to implementing an effective security program.
The prevalence of mobile devices and growing popularity of social media pose a growing risk to sensitive company data. Yet only 47% of respondents said their organizations have a strategy for mobile device security, 31% have a policy for social media security, and 42% said they monitor employee postings to blogs and social networks, PwC said. OE
Brisk M&A buffeted by market swings
After a strong first quarter, oil & gas merger and acquisition activity dipped in the latter part of 1H 2011 amid retreating commodity prices and a sputtering US economic recovery, Deloitte reported in August.
Total deal count in 1H 2011 fell 6.1%, from 213 to 200 compared to the same period in 2010. Total deal value dropped 14.8%, to $89.7 billion.
Transactions were considerably higher in the first halves of both 2011 and 2010 however, when compared to 2009, when the global economy was still reeling from the worst of the global recession.
M&A activity in 1H 2011 ‘was actually fairly consistent with the first half of 2010, but then fell off quite a bit in the second quarter in terms of the number of deals and deal value,’ Deloitte & Touche partner Jim Dillavou said following the release of Deloitte’s M&A 2011 Midyear Report.
‘At the same time, we feel overall the level of activity was strong, certainly stronger than it was in 2009,’ he said.
Upstream – particularly North American unconventional gas plays – dominated the M&A market in 1H 2011 with 149 deals, compared to 164 deals in 1H 2010. Total upstream transaction value fell sharply, however, from $80.5 billion in 1H 2010 to $53.6 billion in the first half of this year.
Wild stockmarket swings and weak economic data could throw a wrench in what was shaping up to be a healthy year for mergers and acquisitions, Dillavou said.
‘We’ll see how that plays out. Because clearly, that could have an impact on activity,’ he said.
Softening stock prices often present buying opportunities for companies with deep pockets, he said. ‘The potential downside is, of course, buyers need credit. And the kind of turmoil we’re seeing in the market could create some issues in the credit market. It could have a temporary impact.
‘But overall,’ Dillavou continued, ‘we’re seeing a lot of activity – a lot of looking at deals, a lot of time spent trying to get deals structured and done.’
Dillavou said he expects M&A activity to regain enough steam in 2H 2011 to finish the year ‘fairly close to the levels of 2010, which were really quite strong.’
In the oilfield services sector, 1H 2011 lacked the ‘mega-mergers’ that fueled activity in 2010 but still finished higher than the same period in 2010.
The total number of deals in 1H 2011 rose 33% to 24 while the total transaction value climbed 14%, from $16.4 billion in 1H 2010 to $18.7 billion in 1H 2011, Deloitte said. OE
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